Unacast scores $1.6M to become the main tracker of every store you visit

The Internet made distance irrelevant.

Now, sensors in physical stores are helping to make proximity relevant, and startup Unacast is announcing a seed round of $1.6 million so it can become the backend.

The Oslo, Norway-based company, which has opened an office in London and is planning one for New York City, has a vision that may excite many marketers and worry at least some consumers.

Here’s the problem Unacast wants to solve, from its announcement:

As soon as the customer leaves [a store or venue with a beacon], he or she becomes invisible, until they resurface in the same location. What the customer did before and after the visit is unknown.

The reason: Stores have separate systems for beacons or other proximity sensors.

To fill in where you went after you left that store, the seven-month-old Unacast is partnering with proximity solution providers, or PSPs. These are companies largely focused on installing and maintaining beacons, but some also track point-of-sale (POS) systems and Web calls prompted by QR code scans of products in stores.

Through its recently launched PROX Network, Unacast says it has partnered to receive proximity data from about ten such companies, including Spark Compass and Mobstac in the U.S. CEO and cofounder Thomas Walle Jensen told me there are about 200 PSPs worldwide.

Beacons are small devices in stores that transmit a unique ID to an app on a smartphone, showing that the user is standing in, say, the games aisle at Walmart. The app then communicates that location through the store Wi-Fi, or cellular data when available, to the marketer’s server. The resulting transmission back to the customer could include a discount coupon for a new game that’s just arrived at Walmart. The PSP, with the store’s permission, provides Unacast with access to the beacon and marketing transmissions.

Unacast also has a media platform that creates anonymous user profiles with that information, enabling more targeted marketing. For example, the University of Mississippi mentioned in the funding announcement that Unacast’s data will enable the school to offer a pizza coupon to a fan visiting the football stadium because his anonymous profile indicated multiple visits to pizzerias in the past month.

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Although it does collect POS- and QR code-related data, Unacast’s main focus is on beacons, Jensen said. The company sees the proximity-sensing market as a fragmented but booming one, building to nearly 100 million beacons worldwide within a few years in 85 percent of the top retailers.

A sensing network that large, of course, is also attracting the attention of many other players. To mention just one, Adobe has emphasized that its Marketing Cloud keeps adding capabilities for targeting customers via beacon IDs and for incorporating the resulting location history into its user profiles.

But, Jensen said, Adobe is only targeting its own domains, retail partners, and channels.

“Since we’re agnostic, we can have a wider reach,” he said. In addition to being a data aggregator, Unacast also wants to become what Jensen calls a “harmonizer,” in part by setting standards for things like the location codes beacons should use everywhere.

Unacast’s ultimate goal: to become the key application programming (API) interface for proximity.

Jensen said the company is in discussions with marketing platforms, but is mostly focused now on providing its data via an API to data management platforms and demand-side platforms for use by advertisers and publishers. For instance, it has partnered with Schibsted, the largest media publisher in Scandinavia.

I’ve just gotten used to having ads for electric tools follow me from website to website for days after I Google-search for an electric drill. What about the creepiness of seeing ads that apparently know the restaurants, movie theaters, and physical stores I’ve been visiting?

“There always will be a certain number of people who find that creepy,” Jensen acknowledged. He noted that Unacast has worked with the privacy regulators in Norway, which he described as among Europe’s toughest, to ensure opt-in for such tracking when users download a store app employed by beacons or other sensors.

And most people opt in, he said, “if the ads are more tailored and let me have a better experience.” Obviously, though, Unacast is not part of every store’s app development requirements.

The new money, Unacast’s only outside funding to date, will be used to grow and scale the PROX and media networks as it supports proximity-oriented marketing campaigns from about a dozen unnamed major brands.

The funders were Trolltech founders Haavard Nord and Eirik Chambe-Eng, New Mark Invest, Ice Leopard Invest, and Blystad Invest.